KUALA LUMPUR, Malaysia -- An environmental group accused the Malaysian government on Thursday of approving three plantations in what it says was supposed to be a protected area on Borneo island. The companies denied their plantations fall in the area.

Friends of the Earth Malaysia said the federal government and the government of Sarawak state broke their promise to declare 1.5 million hectares (3.7 million acres) as a protected catchment area near the Bakun hydroelectric dam in the state.

It said the promise has been made since 1995 to appease those protesting the dam's construction.

"It came as a great shock to us when we discovered that three huge plantation projects are going on," said Mohideen Abdul Kadar, a council member of the group. "This project has been carried out in breach of the promises made by the government."

A catchment area refers to the topography where rainfall is collected naturally before it drains into rivers. It is generally an area above a dam.

Mohideen said the plantations would have "serious consequences for generations to come" with silt spoiling the water for downstream inhabitants and harming the Bakun dam, a 9 billion ringgit (US$2.5 billion; euro2 billion) project expected to be completed by 2009.

The Sarawak government approved the plantations between 1999 and 2002, but the environmental group only found out about them late last year when they "stumbled" upon the approval forms, Mohideen said.

During a recent visit to the area, the group confirmed that land clearing for a 156,000-hectare (385,475-acre) plantation had started, Mohideen said. He said the group did not know the status of the other two forest plantations, which account for another 164,000 hectares (405,245 acres).

As evidence, the group's honorary secretary, Meenakshi Raman, showed reporters several photographs of logging and a video-recorded testimony of two indigenous men who expressed their "pain" over the project infringing on their settlement. The group also handed out a color-coded map showing parts of the plantations inside the catchment area.

The two companies that own the three plantations -- Shin Yang Forestry and Jaya Tiasa, an affiliate of RH Forest Corp. -- said their plantations are not in the protected area.

Simon Chew, senior forest manager of Jaya Tiasa, said all government procedures were followed and "our plantations are definitely not within some catchment area."

Government officials could not immediately be reached for comment.

Mohideen said while approval forms stated there were no people living in the planned plantation area, the environmental group had met five communities of Penan indigenous people who have lived in the area where the largest of the three plantations is being planned.

The 2,400-megawatt Bakun dam has been controversial from the start with environmentalists and advocates of Borneo's indigenous people protesting the project because it would flood an area the size of Singapore and displace thousands of people.